Britain’s Cineworld Group (CINE.L), the parent company of Regal Cinemas, is preparing to file for bankruptcy after struggling to climb back from pandemic lows, according to The Wall Street Journal.
Share plunged on the news, down more than 50% in early morning trading.
The report added that the company, which acts as the world’s second largest cinema chain, has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process.
It is expected to file a chapter 11 petition in the United States and is considering filing an insolvency proceeding in the U.K.
Cineworld did not immediately respond to Yahoo Finance’s request for comment.
The report comes after the company warned on Wednesday that a lack of big-budget movies will likely impact attendance through the fall, affecting its ability to cut debt.
The chain admitted it was in discussions with shareholders over a potential restructuring deal, adding that “any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld.”
The stock fell to its lowest level following the announcement, plunging as much as 61% on the day.
Cineworld has run up debt of more than $4.8 billion after losses accelerated during the pandemic, according to the Guardian.
AMC (AMC) CEO Adam Aron responded to the news in a tweet on Thursday, writing that the theater chain is “quite optimistic and confident in our future” — despite Cineworld’s woes.
AMC’s stock is down about 30% year-to-date.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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